My colleague Dinah Walker has just published charts comparing the US recovery to its predecessors, which have been updated to include today’s revised third quarter data. Two points:
1. The current recovery is the weakest of the post-war period. That’s true even if you treat the 1980-84 double-dip recession and recovery as a single episode, as we do here. That recovery had been the weakest previously.
2. A convincing case can be made that the slowdown in business investment in the third quarter reflects growing concerns about the fiscal cliff. At the same time, it is striking that we have seen so little of a fiscal cliff effect on consumer confidence and spending. The catch-up by consumers, if we go off the cliff, could be swift.